German Perspective - 12.12.17
12/12/2017
It shows in any case that tanners are finding the material they need and and are opting to take fresh material ahead of salted. Tanners consider the salted material as a back-up for the expected lower kill at the beginning of the New Year. Quite a number of people are hoping for a decline in the kill at the beginning of the New Year, thinking it could offer the chance to bring the market into better balance. For premium hides consumed mainly in Europe this could definitely be an option, but for standard materials, which have to compete with international supply origins, this could be a bit optimistic. For the moment the conclusion can only be that with a few exceptions there are more hides available than tanners are willing or able to buy.
Most large beef producers and hide suppliers around the globe continue to try everything to stabilise the market trends. Time will tell if they will succeed, but at least in case of the leather business we would assume that the significant price correction in many origins will allow the tanneries with orders in hand to achieve a reasonable margin. For those who have no leather orders, the lower prices will not help.
Bad news from China continues to come in. Further environmental controls are forcing more tanners to shut down whether they have orders to fulfil or not. The iron fist of the government is making tanners think twice before they commit to buying raw material. Hand to mouth is at best what we can expect from the north of China, most likely for the rest of the winter season. In Europe we have to assume that most tanneries have planned their budgets and have covered their needs. There are a few windows opening for immediate supply of selected items. However, this has nothing to do with regular business.
On the positive side, there have been more bits and pieces sold this week than in many weeks before, although one can see that this is just short-term coverage of premium material rather than the indication of better leather demand and more raw material requirements.
Prices for premium hides have been pretty stable but most of the bids coming out of China have been too low to be seriously considered.
The kill: The extremely wet weather conditions as well as low temperatures are keeping the kill at consistently high numbers. As far as weights and volumes are concerned one cannot really complain. Christmas Eve is on a Sunday this year and that makes us believe that we won’t see much change until then.
What do we expect: With the exception of quality material, we expect the market to continue to remain under pressure. No real fight back is happening for standard leathers and there seems no realistic chance of reversing the price trend in the short term.
| Type | Weight range | Avg. green weight | Salted weight | Avg. weight salted | Price per kg green weight | Trend |
| Ox/heifers | 15/24,5 kg | 22,0/23,5 kg | 13/22 kg | 20/21 kg | € 2,20 |
Weakish |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 1.40 |
Weak |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1.50 |
Weak |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,20 |
Weakish | |
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,15 |
Weakish | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,75 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.75 |
Steady |
|
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 1.70 |
Steady. |
|
| Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € 1,00 |
Weakish |
| Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 1.10 |
Steady |
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